How to determine whether the purchase price is appropriate?

By justchinait
January 28, 2021

He can buy 3 fish for 1 CNY and give free chili. He was happy for a long time and decisively called for delivery. He prepared to make a chopped pepper fish, a steamed fish, and a braised fish. But he was dumbfounded when he got the fish

For products that do not match the cost, only the price can make people feel welcome!

We usually find in supermarkets and online shopping: all products have clearly marked prices, as long as you know your preferences, product size, color, brand, and other main information, and then refer to the price of the product, you can choose the most suitable product. However, the raw materials, components, auxiliary materials, and other industrial products purchased by suppliers are different from mass consumer products. It is difficult to determine the market price of them directly, and even manufacturers do not have a unified external price.

If you have been engaged in purchasing for a long time, you will find that purchasing materials are a tedious task, but it is not a difficult thing. There are some methods and rules for it, below we summarize from different aspects, how to determine whether the purchased product price is appropriate?

1. Get familiar with the product.

Briefly understand the structure of the product and what materials it consists of.

2. Familiar with the product market

the same product has different prices in different seasons and different times. Just like grocery shopping, the price is different every hour.

3. On the basis of familiarity with the market

you will formulate an appropriate price range based on quality, quantity, and delivery. Factors such as high quality, small quantity, urgent delivery, and other factors will cause suppliers to offer higher prices, which is reasonable.

4. Communicate with more suppliers and compare their quotation, there will be better prices.

5. Check the prices of similar products on the Internet. Although they are often inaccurate, you can refer to them. Note that the data on the Internet is often irresponsible, any prices you can see here, so you must not purchase according to this price.

6. Be careful

price and quality often have a certain correlation, don’t ignore quality.

7. Material cost

For example, for injection molded parts, the supplier’s quotation is generally based on the material cost, multiplied by a coefficient between 1.5 and 2.5.

If it is a standard part or mass purchase, the coefficient will generally be between 1.5-2.0,

If it is the case that the purchased quantity of customized parts is small, the coefficient will be between 2.0 and 2.5.

If the coefficient exceeds this range, the price may be unreasonable.

8. Labor costs

For example, packaging (referring to simple packaging without material costs), first need to understand the detailed packaging process and the daily output of each assembler. According to the local wage level, calculate the labor cost required to complete each product. Then multiply it by a coefficient of 3~4. This is just the simplest manual packaging, and it may be even higher depending on the complexity of the assembly process.

9. The price of new products will be high

because of the high cost of design and development and mold developing of new products, and the cost of the products will be shared with the cost of early development.

In the process of product purchasing, we are not blindly pursuing the lowest price, but the best price. Although it is not an easy task, in the process of continuous learning and practice, you will understand after slowly experiencing and summarize.

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